Global consulting giant PwC was paid $105,000 in a fortnight to provide just six staff to the Industry department to assist in the assessment and issuing of government grants.
Industry department officials were questioned at a Senate Estimates hearing on Thursday afternoon about a near-$2 million contract awarded to PwC at the start of the year for “surge capacity”.
The officials said that this contract will see PwC staff “embedded” within the Industry department and working across AusIndustry’s 250 programs, including drawing up grant guidelines and assessing applications.
The $1.9 million price tag for the contract is the “upper limit” of its worth, with its value determined by the number of staff utilised.
A department official said that in the last fortnight PwC was awarded $105,000 with six staff assisting the Industry department across this time. This equates to $17,500 per fortnight per consultant, or $8750 per week.
Across the fortnight, these consultants were paid $1750 per day to work for the Industry department.
“They’re working across different teams – they’re embedded with existing staff processing applications, and in some cases they may be involved with some eligibility checking or doing some forms of assessments for some grants,” Industry department deputy secretary Mary Wiley-Smith told the Estimates hearing.
The Industry officials said they expected this fortnightly rate to increase to $300,000 in the current fortnight. They took a question on notice to provide the full figures.
The outsourced work is required because of an “unprecedented” surge in work related to Industry department grants, the officials said.
“Sometimes we do have an unprecedented surge and that’s what’s happened in this instance in terms of AusIndustry. We’ve got increasing numbers of grants which need to be worked through and advanced,” Ms Wiley-Smith said.
“The peak there is in March this year. And there’s a backlog in variations to existing contracts which is quite significant. We had a look to surge people within the department or across departments – in this instance we were able to get some of the staff from other areas come in and assist but we still needed to go out and get extra support from the market.”
Labor senator Anthony Chisholm criticised the use of consultants to work on grants programs in the lead up to the federal election.
“Taxpayers are forking out millions of dollars to process election promises from the government. It’s outrageous we’re paying tens of thousands of dollars to a consultancy firm to get another pork barrel from this government ready,” Senator Chisholm said.
The Industry department has paid consultants about $24 million this financial year, and issued contracts worth a total of $34 million.
This is mostly to obtain international expertise and for that surge capacity, the department officials said.
“The reason we go to consultancies is expertise and generally that’s beyond the national [expertise available], we look at international expertise and where we can draw on that,” Industry department secretary David Fredericks said.
“The majority of our contractors are in the chief information division, and that’s a cultural issue – the ICT industry in this country is fundamentally a contractor-based industry and in many ways our interaction with that industry means we have to rely on contractors to do that.”
“We jealously guard our ASL and our public servants for policy work and program development – all the work that traditionally the public service is relied upon and we tend to use contractors where the market requires us to use them, or we’re dealing with short-term services where it makes sense to use an outsourced provider for a surge.”
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